History of Foreign Investment in Iran

The history of foreign investment in Iran dates back to the late 19th century, when the Russians signed some contracts in various areas including telegraph, railway, fishing, banking, transportation, petroleum, etc. During a period of 30 years (1881-1992), about 100 million Rubles was injected to the Iranian economy. England was also among the early investors in Iran that invested about 70 million Lire, the most important of which was the Ruiter and Darcy contracts that led to the foundation of Iran and England Oil Company.

Until 1980s, some foreign investments were done in technology section and about 28% of all foreign investments were accompanied by technology transfer. After the Islamic Revolution, a huge amount of investment was taken out from Iran and a crisis occurred in Iranian industrial, social and political system. At this point, the government decided to take control of most of the economic activities and so foreign investment descended more than ever.

It was during the1980s that some laws were approved and as a result, countries like England, Sweden, Germany and Italy, along with some Asian countries, started their investments in Iran. These investments were mostly in petrochemical section (about 60%, 31 billion $), after which came car factories, buildings, hotels and metal industries.

This improvement continued to the 1990s and the foreign financial facilities were guaranteed by the government. When Khatami became the president in late 1990s, he facilitated foreign investments by reducing the risk of investing in Iran. From then on, the more opportunities were provided for investment in Iran and the rate of foreign investment increased significantly. It has been estimated that the amount of foreign investment in Iran was 3.5 billion $ and this increasing trend is not stopped there.